Niall Ferguson Vs. Keynes, the (Gay, Childless) Futurist

Takeaways

I see us free to return to some of the most sure and certain principles of religion and traditional virtue: that avarice is a vice, that the exaction of usury is a misdemeanor and the love of money is detestable.

Harvard historian Niall Ferguson recently asserted that John Maynard Keynes was indifferent to the long-term consequences of deficit spending because Keynes was gay and childless — and thus didn’t care about future generations. Ferguson apologized for his remarks. But he might not have made them in the first place if he had read — as you can below — Keynes’ “Economic Possibilities for Our Grandchildren.”

We are suffering just now from a bad attack of economic pessimism.

It is common to hear people say that the epoch of enormous economic progress which characterized the 19th century is over, that the rapid improvement in the standard of life is now going to slow down, that a decline in prosperity is more likely than an improvement in the decade which lies ahead of us.

I believe that this is a wildly mistaken interpretation of what is happening to us.

We are suffering not from the rheumatics of old age, but from the growing pains of over-rapid changes, from the painfulness of readjustment between one economic period and another.

The increase of technical efficiency has been taking place faster than we can deal with the problem of labor absorption. The improvement in the standard of life has been a little too quick.

The prevailing world depression, the enormous anomaly of unemployment in a world full of wants, the disastrous mistakes we have made, blind us to what is going on under the surface to the true interpretation of the trend of things.

For I predict that both of the two opposed errors of pessimism, which now make so much noise in the world, will be proved wrong in our own time — the pessimism of the revolutionaries who think that things are so bad that nothing can save us but violent change, and the pessimism of the reactionaries who consider the balance of our economic and social life so precarious that we must risk no experiments.

For the moment, the very rapidity of these changes is hurting us and bringing difficult problems to solve. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come — namely, technological unemployment.

This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.

But this is only a temporary phase of maladjustment. All this means in the long run is that mankind is solving its economic problem. I would predict that the standard of life in progressive countries 100 years hence will be between four and eight times as high as it is today.

There would be nothing surprising in this even in the light of our present knowledge. It would not be foolish to contemplate the possibility of far greater progress still.

Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes — those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows.

Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable. For the higher the general level, the higher still are they. But this is not so true of the absolute needs. A point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.

Thus, for the first time since his creation, man will be faced with his real, his permanent problem — how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.

The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.

Yet there is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread. For we have been trained too long to strive and not to enjoy.

It is a fearful problem for the ordinary person, with no special talents, to occupy himself, especially if he no longer has roots in the soil or in custom or in the beloved conventions of a traditional society. To judge from the behavior and the achievements of the wealthy classes today in any quarter of the world, the outlook is very depressing!

For these are, so to speak, our advance guard — those who are spying out the promised land for the rest of us and pitching their camp there. For they have most of them failed disastrously, so it seems to me — those who have an independent income but no associations or duties or ties — to solve the problem which has been set them.

I feel sure that with a little more experience we shall use the new-found bounty of nature quite differently from the way in which the rich use it today, and will map out for ourselves a plan of life quite otherwise than theirs.

For many ages to come, the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich today, only too glad to have small duties and tasks and routines.

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But beyond this, we shall endeavor to spread the bread thin on the butter — to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a 15 hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!

There are changes in other spheres too which we must expect to come. When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals.

We shall be able to rid ourselves of many of the pseudo moral principles which have hagridden us for 200 years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues.

We shall be able to afford to dare to assess the money motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard.

Of course, there will still be many people with intense, unsatisfied purposiveness who will blindly pursue wealth — unless they can find some plausible substitute. But the rest of us will no longer be under any obligation to applaud and encourage them.

I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue: that avarice is a vice, that the exaction of usury is a misdemeanor and the love of money is detestable, that those walk most truly in the paths of virtue and sane wisdom who take least thought for the morrow.

We shall once more value ends above means and prefer the good to the useful. We shall honor those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.

But beware! The time for all this is not yet. For at least another 100 years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not.

Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.

I look forward, therefore, in days not so very remote, to the greatest change which has ever occurred in the material environment of life for human beings in the aggregate. But, of course, it will all happen gradually, not as a catastrophe.

Indeed, it has already begun. The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed.

The critical difference will be realized when this condition has become so general that the nature of one’s duty to one’s neighbor is changed. For it will remain reasonable to be economically purposive for others after it has ceased to be reasonable for oneself.

The pace at which we can reach our destination of economic bliss will be governed by four things: our power to control population, our determination to avoid wars and civil dissensions, our willingness to entrust to science the direction of those matters which are properly the concern of science, and the rate of accumulation as fixed by the margin between our production and our consumption — of which the last will easily look after itself, given the first three.

Meanwhile there will be no harm in making mild preparations for our destiny, in encouraging, and experimenting in, the arts of life as well as the activities of purpose.

But, chiefly, do not let us overestimate the importance of the economic problem, or sacrifice to its supposed necessities other matters of greater and more permanent significance.

It should be a matter for specialists — like dentistry. If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!

Editors note: This Globalist Document is excerpted from John Maynard Keynes’ “Economic Possibilities for Our Grandchildren,” which was published in his 1931 collection Essays in Persuasion.